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2018 Supreme(Kar) 438
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
S. SUJATHA, J.
M/s ICICI Bank Limited - Petitioner
Vs.
The Joint Commissioner for Road Transport Rural and Urban Division & Ors. - Respondents
W.P. Nos.9217 & 39154 – 39157 of 2014 c/w W.P. Nos.9218 & 39158 – 39161 of 2014, W.P. No.9219 of 2014, W.P. No.9220 of 2014 & W.P. No.9221 of 2014 (T – MVT)
Decided On : 22-03-2018
For the Petitioner: Smt. Jai M. Patil, Adv.
For the Respondents: Sri T.K. Vedamurthy, AGA.
Headnote:KARNATAKA MOTOR VEHICLES TAXATION ACT, 1957 [K.A. No. 35/1957] - Sections 3, 4 & 9 - Scheme of the Act - Ownership and possession of the vehicle - Held, Burden lies on the Bank/financier, to establish that the petitioner-Bank is not the owner of the vehicles in question or not in possession of the vehicles - Possession and control of the vehicle depends on the records maintained by the Authority - A registered owner continues to be liable for payment of motor vehicle tax up to the date when he ceases to be the owner - If the Registration Certificate speaks about the possession of vehicle in question, same cannot be ignored.
KARNATAKA MOTOR VEHICLES TAXATION ACT, 1957 [K.A. No. 35/1957] - Sections 4, 9, 12(1)(a) & 12-B & Karnataka Motor Vehicles Taxation Rules, 1957 - Rule 29 & Motor Vehicles Act, 1988 - Section 2(30) - Payment of arrears of tax - Demand for penalty, under Section 12-B of the Act 1957 - Presumption under Section 2(30) of the Act 1988 regarding possession of vehicle - Held, person who takes possession and control of the vehicle, either as a lessee or a financier, becomes liable to pay the taxes as a co-obligate - Here, in the absence of transfer effected in the Registration Certificate as regards, the sale made by the petitioner-Bank in favour of respondent 3 or, in other words, the petitioner continues to be owner or in possession of the vehicle in terms of Registration Certificate, held, his liability to pay taxes does not cease - Same cannot be considered to be legal to fix the liability on respondent 3 as the registered owner - There is a presumption in law that the registered owner, in terms of Section 2(30) of the Act 1988 is in possession of the motor vehicle in question - Further No penalty under Section 12(1)(a) of the Act 1957 is levied in present case - In the demand notice, it is explicitly made clear that the petitioner can compound the offence punishable under Section 12(1) and (3) of the Act on payment of such sum to the prescribed Authority, in lieu of prosecution - As the same has not been availed by petitioner, he cannot raise any grouse against the demand for penalty made under Section 12-B of the Act - Therefore, impugned order of Appellate Authority, rejecting the refund of tax and penalty deposited by petitioner for period 2006-2010 is proper - As for period 2005-2006, action was initiated under Section 12(1)(a) of the Act, before the jurisdictional Criminal Court, whereby on the memo of settlement filed by parties, in view of tax amount being discharged by petitioner-Bank, the said proceedings came to be dropped, thereby an acquittal order has been passed in said criminal proceedings - in such a scenario, held, demanding further penalty for period 2005-06 is not justified and set aside.
These batch of matters are directed against the order of the Joint Commissioner for Transport (Rural and Urban Division)/Appellate Authority, whereby the payment of arrears of tax relating to 5 stage carriages for the period from 01.01.2005 to 31.03.2010 has been confirmed.
2. Since common questions are involved, the petitions are heard together and disposed of by this common order.
3. The petitioner is a bank who had financed for purchase of the vehicles in question to one Sri. V.G. Nagabhushana, the registered owner committing default in payment of loan, the petitioner-bank being the financier, took possession of the said vehicles. The RTO had proceeded against the petitioner-bank for payment of arrears of tax relating to the subject vehicles on the ground that the petitioner-bank took possession of the said vehicles and continued to be in possession of the said vehicles during the relevant period. The demand made by the RTO was confirmed by the Appellate Authority. Against which, Writ Petition Nos.26040/2012 and connected matters were filed. This Court by order dated 06.12.2012, set aside the order of the Appellate Authority and remitted the matters for fresh consideration in accordance with law. Pursuant to which, the Appellate Authority has passed the common Judgment dated 04.12.2013. Aggrieved by the same, the petitioner has filed the writ petitions.
4. Learned counsel Smt. Jai M. Patil, appearing for the petitioner-bank would submit that the Appellate Authority passed the order mechanically without application of mind much against the directions issued by this Court in W.P.Nos.26040/2012 and connected matters. It is the contention of the learned counsel that the vehicles in question were sold to the third respondent and material was placed before the Appellate Authority to establish the same. However, the Appellate Authority failed to consider the payment receipts produced by the petitioner which was deposited by the third respondent towards purchase of vehicles. The action of the first respondent in dismissing the appeal on the ground that the petitioner has not obtained fresh registration certificate before selling the vehicles is erroneous and has resulted in miscarriage of justice. The first respondent erred in not calling upon the second respondent to prove that the vehicles were in the custody of the petitioner-bank when this court specifically remanded the matter for this particular purpose, the first respondent rejected the contention of the petitioner, placing reliance on the judgment of the Hon'ble Apex Court in the case of STATE OF KARNATAKA V/S. GOPALAKRISHNA SHENOY, reported in 1987 (2) KAR LJ 266, which is not applicable to the facts of the present case. Thus, it was argued that the demand of the tax made by the Authorities against the petitioner when the vehicles are not in possession of the petitioner is unjustifiable and contrary to the provisions of the Act. It was further contended that the respondent Authorities demanding tax as well as penalty amount is illegal. According to her unless there is conviction, no penalty can be demanded.
5. Learned counsel relied on the following judgments :
1. ‘VINAYAKA BHAT v. STATE BY ASSISTANT REGIONAL TRANSPORT OFFICER’ reported in ILR 1993 KAR 176;
2. HEAD MASTER, ‘BHARAT MATHA SCHOOL v. STATE OF KARNATAKA’ reported in [2013] 4 KLJ 412; and
3. ‘ARIF MUNEWAR v. THE REGIONAL TRANSPORT OFFICER, JAYANAGAR, BANGALORE AND OTHERS’ reported in [1998] 5 KLJ 131.
6. Learned Additional Government Advocate Sri. T.K. Vedamurthy, appearing for the respondent Nos.1 and 2 justifying the impugned orders, submitted that the vehicles in question were taken possession by the petitioner-bank and the declaration of nonuse made by the bank was provisionally accepted by the Authorities. It was noticed by the Inspector of Motor Vehicles that the subject vehicles were removed from the declared place of garage. No permission was obtained for removing the vehicles from the declared place of g
